China: A Lucrative Market for Autonomous Car

Finally, the untiring effort of dotcom (.com) tech-giants and Original Equipment Manufacturers (OEMs) changed science fiction of autonomous cars into reality. These driver-less cars are expected to be commercially available in the near future as they are already on the road for the final stages of testing.

Besides global customers, Chinese people are enthusiastically waiting for this autonomous car. According to a survey by World Economic Forum (WEF), 75% Chinese are willing to ride in such car. Moreover, a greater proportion of Chinese population are willing to own self-driving car due to its appealing autonomous features. This rate of acceptance of autonomous car in China is quite high in comparison to the US, Japan and Germany

The growing love affair of Chinese people with autonomous car is encouraging local tech-giants—Baidu, Alibaba and Tencent—in the fast development of driver-less car. In order to tap into the growing business opportunities in the country, Baidu has developed its open source driving platform which is known as Apollo. Similarly, with an aim to launch autonomous car by the beginning of 2020, it (Baidu) has formed a joint venture with Anhui Jianghuai Automobile (JAC)—a China based OEM. The company (Baidu) recently announced to invest over US $1.5 billion to speed up technical development of self-driving car.

The lucrative opportunity in the autonomous car market segment in China is also attracting OEMs players from the West. In the process to enter Chinese autonomous car market, HERE consortium sold its 10% shares to NavInfo, Tencent and GIC Private Limited. The move is expected to give easy entrance to German OEMs in Chinese market.

Besides, the government of China is also encouraging local tech-giants and OEMs in the development of self-driving cars as it can stimulate the economy of the country by exporting driver-less cars. As per WEF, the digital transformation of automotive industry is likely to generate US $67 billion value for the sector (automotive) and over US $3 trillion in societal benefits globally by the end of 2021.

Subarna Poudel is a researcher with Frost & Sullivan. He can be reached at subarna.poudel@frost.com

Sapan Agarwal drives content and marketing for Frost & Sullivan. Sapan is based out of Kuala Lumpur Malaysia and can be reached at sapan.agarwal@frost.com | +603 6204 5830